Wheat Is the Crop Afghans Switch to from Opium

Unfortunately, the US military is notoriously bureaucratic. But, still, it does seem to be learning, and it was the civilians that pushed it into Iraq and kept the focus off Afghanistan when there was a reasonable chance of success.

At this point I see no hope for a good outcome. But as late as four years ago, I think we still might have taken the country back from the drug lords and Taliban and handed it over to a more traditional government. The key to such a strategy would have been wheat.

Why Wheat Is the Answer

Almost every Afghan farmer grows wheat—there’s no need to teach them how.

High wheat-shortage prices cause farmers to shift significantly from opium to wheat.

Asia has chronic wheat shortages, so it would not go to waste.

Paying enough to make this happen costs a lot less than the war.

It would double the income of the 80% of the population that needs it.

This would solve the warlord problem.

They get most of the drug money. They run the country.

That’s who we are fighting for now. If we win we lose.

Buying wheat would change the game—in our favor. It’s not cheap, but it would save us a lot of money because losing for $90 B/year is not cheap either.

The key: Buy wheat for $1.50/kg, and sell wheat flour for $0.25/kg

What’s the cost? Afghanistan only grows half its wheat now, but assume it grew it all and we bought it all. 5 billion kilograms = $6.25 B/year net cost.

Opium? Opium is only 2 or 3 times more profitable per acre than wheat, at the normal price of wheat, $0.25/kg. But that’s the wrong measure. Land is not the main cost of opium. Labor is. Figuring labor, it’s much closer. In fact (PDF report Table 1) richer farmers with a little flexibility only grow about 40% poppies in the area where opium is most profitable. Even a $0.50/kg price of wheat, for a short time in 2008, made a noticeable dent in opium. A $1.50 sustained price, it would knock out most opium.

Drug lords? Everywhere in the world where there is massive illegal drug trade, there is massive violence, instability, and corruption. No opium, no drug trade. This is already happening [as of 2008] in the north (most of Afghanistan). It can happen in the south.

Taliban? The Taliban skims about 10% off of the $3B/year opium trade, and that would rapidly diminish. But they can tax other things if they want. Their support comes from the poorest layer of society. Average income is $1/day, so the average for the poorest half of society is probably about $0.50 or less. This comes to about $3B. In other words, this purchase would more than double their income. (Opium farmers only make $0.7B.) The choice between doubled income and a repressive religion that you don’t like is an easy one.

Development: The traditional development establishment is right; many more things matter. But this would make all of them much easier. And much would just happen. That has been seen. When people get more money, they buy farm animals, plant more kinds of crops, and agricultural trade takes off—even without expert assistance.

Security: Fewer Taliban, fewer drug lords, much more appreciation of the foreigners. All this makes security far easier for the U.S. to provide directly or by training Afghanis.

Why hasn’t this been done? Consider the excellent effort of the British development team, DFID, which is spending about $4 million in Helmand province, the heart of Taliban opium, which accounts for 65% of Afghanistan’s opium. They are using wheat to replace opium, and getting more done for their money than the Buy-Wheat approach. But they tell us “The dividend will be reaped in the medium to long term, and will require … massive, coordinated and continuous investment. …This provides a daunting challenge for the government. … There are no shortcuts.”

Given their extreme budget constraints they are right. But spend 1000 times more money—which is still 20 times less than the military budget—and things could speed up. A lot. There are shortcuts! And given the rapid advance of the Taliban, “no shortcut” means defeat. It is time to think different, as we say in America.

How do you prevent wheat-subsidy corruption? There are wheat mills scattered throughout Afghanistan. NATO would have to secure a lot of these, and probably expand them. These would buy wheat at a subsidized price (Hey we know how to do this in the Midwest) and sell the flour at market prices. Milling the wheat would mean no one could sell it to you twice. There would be some middle men trying to skim off the subsidy, but farmers would fight hard to stop this, and there would be a lot of competition between middle men unless they were part of someone’s army. The worst of this could be stopped and we would have most of the population on our side.

James Nathan: Buy all Afghanistan’s OpiumMay 9, 2009, Stoft. SourceNathan, a former Foreign Service officer, explains why buying all of Afghanistan’s Opium would do more good than 10 times the money spent on military operations. At most it would cost about $5 billion. We’re now spending $65B/year. see also Jonathan Power

I looked into this approach first. I ran the number on how much opium production could expand. This strategy would end in catastrophe. Buying wheat is safe and moves everyone in the right direction.

Clinton figures out agriculture is important. But she wants to retrain the farmers and bring them electricity. Fine. But that takes five years if you’re lucky. Getting this job done one year quicker will save enough money to buy all the opium for 20 years.